The Rise of FinTech and the Journey Toward a Cashless Society: Investigating the Use of Mobile Payments by SMEs in Oman in the Context of Vision 2040

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

The aim of the study is to analyze the variables affecting the use of mobile payment systems in Oman, to identify financial, operational and security barriers. It also investigates how these systems can support economic growth in Oman.

The findings of the study show that the adoption rates of mobile payment systems are limited, especially by small and medium-sized enterprises (SMEs), due to high transaction fees. However, it was observed that transaction times were significantly reduced and lower transaction fees increased adoption rates. It was also determined that user errors negatively affected usage.

Strengths of the study: Implementation-Oriented Policy Recommendations: Results are directly linked to Oman’s digital transformation strategies.

In-Depth Analysis of Financial and Operational Barriers: A comprehensive assessment of both transaction fees and transaction times is provided.

Weaknesses of the study: The study is based only on secondary data, which means it does not include direct user opinions.

Elements such as users’ payment habits and technological awareness could be examined in more detail.

The study targets the development of fintechs, which have taken an important place in the finance literature in recent years, in Oman. 
The purpose of the study is emphasized. However, it is also important to reveal the need that this study stems from. Why is it important for Oman to conduct this study? The fact that the fintech issue has not been sufficiently addressed in developing countries reveals the gap in the literature, but it is far from being a theoretical justification for the study. Therefore, it should be specifically emphasized why the study is necessary for Oman - which basic need it stems from. 
Although it is nice to mention the compatibility of fintechs with the Oman 2040 vision, I think international readers are not informed about this vision. Therefore, it would be useful to provide information about the Oman Vision 2040. 
In order to better understand the data structure, it is suggested to classify it as type, source, etc. and show it in a table. Dependent-independent variables should also be shown in the table. 

Actually I would like to see how the author/s applied SEM-Structural Equation Model.

It would be good to make a more concrete explanation about Figures 7-8-9-10. 
It would be useful to write the source under Tables 3 and 4. 
The study findings should be compared with the literature. / Originality should be stressed clearly.

Author Response

Reviewer Comment 1:

"Please provide a broader presentation of the current state of research on the use of mobile payment systems in countries that are leaders in this field, e.g., China, the USA or the European Union."

Response:

We appreciate your insightful feedback. In light of your suggestion, we have enhanced the "Literature Review and Hypotheses Development" section to present a more comprehensive overview of the adoption of mobile payments in prominent markets such as China, the USA, and the European Union. The new content outlines essential factors influencing adoption in each region, including regulatory frameworks (e.g., PSD2 in the EU), QR-code-based platforms (such as WeChat Pay and Alipay in China), and concerns regarding data privacy in the USA. This comparative analysis provides context for Oman's adoption path by placing it within the larger global framework.

All added and highlighted in page 11.

Reviewer Comment 2:

"In summary, the obtained results should be related to the state of research on the use of mobile payment systems in countries advanced in this field (the USA, the European Union and China)."

Response:

We are grateful for this recommendation. In response, we have revised the Discussion section to better frame our findings in the context of research and trends from nations with sophisticated mobile payment systems. In particular, we draw parallels between Oman’s operational advancements and challenges in adoption with global experiences, such as the swift integration of mobile payments in China and the regulatory backing seen in the EU. This comparative approach emphasizes Oman’s advancements and underscores the necessity of addressing transaction fees, enhancing digital literacy, and ensuring regulatory support to realize the objectives of Vision 2040.

All added and highlighted in page 30.

Reviewer 2 Report

Comments and Suggestions for Authors

The article meets the requirements for scientific works, both in terms of theoretical foundations, methodological assumptions and the analysis of the collected empirical research material.

Please provide a broader presentation of the current state of research on the use of mobile payment systems in countries that are leaders in this field, e.g. China, the USA or the European Union.

In summary, the obtained results should be related to the state of research on the use of mobile payment systems in countries advanced in this field (the USA, the European Union and China).

Author Response

Comment 1:

“Weakness: The study is based only on secondary data, which means it does not include direct user opinions.”

Response:

We acknowledge this limitation. To address this, we have added a statement in the Limitations and Future Research Directions section explicitly noting the reliance on secondary data and suggesting that future studies incorporate primary research methods (e.g., surveys or interviews with users and SMEs). Page 34

Comment 2:

“Elements such as users’ payment habits and technological awareness could be examined in more detail.”

Response:
Thank you for this suggestion. We agree that deeper analysis of payment habits and technological readiness would enhance understanding. We have noted this in the Future Research Directions, recommending targeted studies into behavioral and demographic dimensions of mobile payment adoption.

Added and highlighted in page 34.

Comment 3:

“The study targets the development of fintechs in Oman... However, it is also important to reveal the need that this study stems from.”

Response:
We appreciate this valuable comment. We have revised the Introduction to include a justification for why this study is urgently needed in the Omani context—specifically, due to the country's rising digital transaction volume, fintech gap among SMEs, and its regional ambitions underdeveloped compared to neighbors like the UAE.

Added and highlighted in page 3& 4.

Comment 4:

“Actually I would like to see how the author/s applied SEM-Structural Equation Model.”

Response:
We appreciate the reviewer highlighting the necessity of clarifying the role of Structural Equation Modeling (SEM) in this research. Although SEM was contemplated during the initial methodological planning phase—especially for investigating latent relationships among variables—it was ultimately not utilized. This choice stemmed from the constraints of the available secondary data, which did not fulfill the prerequisites for applying SEM, including the presence of observed indicators for latent constructs, an adequate sample size, and the condition of multivariate normality. Consequently, the final analysis utilized multilevel regression, interrupted time series (ITS), and logistic regression models, which were more suitable for the data's structure and scope. A clarification has been incorporated into the Data Analysis Methodology section to reflect this decision. Additionally, all previous mentions of SEM that were written in the past tense have been revised or eliminated to ensure methodological precision and coherence throughout the manuscript.

Added and highlighted in page 19 & 22.

Comment 5:

Although it is nice to mention the compatibility of fintechs with the Oman 2040 vision, I think international readers are not informed about this vision. Therefore, it would be useful to provide information about the Oman Vision 2040.

Response:

Thank you for your comment. The introduction was supported by information on the Oman 2040 vision (Pages 2 and 3)

These platforms align with Vision 2040’s objective of enhancing Oman’s digital economy, contributing to faster, more secure payment solutions for diverse users, including small and medium-sized enterprises (SMEs).

These systems are crucial to Oman's move towards a cashless economy, aligning with the government’s Vision 2040 initiative, which focuses on technological progress and economic diversification.

The Vision 2040 initiative highlights the significance of encouraging innovation, especially in the financial sector, to lessen dependency on cash transactions and advocate for digital payment methods.

Comment 6:

In order to better understand the data structure, it is suggested to classify it as type, source, etc. and show it in a table. Dependent-independent variables should also be shown in the table.

Response:

Thank you for your comment. The data structure has been revised in the methodology section, and the study variables are presented in a table (Table 3, page 17).

Table 3 shows the main variables analyzed in this study as follows:

Table 3. Definition of variables

Variables	Definition
Adoption Rates	The percentage of consumers and businesses utilizing mobile payment platforms in Oman, reflects the overall uptake of digital payments.
Transaction Volume	The total number of transactions processed through mobile payment systems, including Apple Pay and Google Pay, indicating platform usage frequency.
Transaction Value	The cumulative monetary value of transactions conducted via mobile platforms, offering insights into the financial scale of mobile payment adoption.
User Errors	Common issues impacting user experience and trust, such as authentication failures and security-related challenges may hinder adoption rates.

Comment 7:

It would be good to make a more concrete explanation about Figures 7-8-9-10.

Response:

Thank you for your comment. More concrete explanations about figures 7,8,9, and 10 have been added (Pages 20 and 21).

Figure 7 illustrates the skewed distribution toward lower fees with occasionally high outliers, which could disproportionately impact SMEs. This pattern indicates an inconsistent pricing system that may impose significantly higher costs on some users (especially in certain situations) than others. This particularly affects small and medium-sized enterprises (SMEs), as they may be unable to bear these sudden high costs, potentially hindering their adoption or continued use of the service. Figure 8 displays active engagement, showing a range in usage patterns that may reflect varying levels of adoption among different demographics or business types. This disparity may reflect differences in adoption among user groups (individuals, businesses, and organizations). Furthermore, it may reflect differences in actual need for the service or comfort level with technology. This indicates the need to understand user characteristics and behavior more deeply and perhaps tailor promotional or training strategies to each group to enhance engagement.

Figure 9 shows a relatively low error frequency but emphasizes the potential for errors, particularly authentication issues, to affect continued usage. Even if the error rate is small, the nature of the error (such as difficulty logging in or data loss) can lead to user frustration and possibly churn. This requires focusing on improving the user interface and verification processes, and providing prompt technical support to anticipate and mitigate these issues. Figure 10 highlights current adoption levels with room for growth, especially if transaction fees are reduced or user experience is enhanced. Some users have started using the system, but there are large groups that have not yet adopted it. To increase adoption, focus can be placed on reducing fees to make the service more attractive, improving the user experience to reduce technical or psychological barriers, and providing incentives for new or regular users.

Comment 8:

It would be useful to write the source under Tables 3 and 4.

Response:

Thank you for your comment. We have added the source under tables 3 and 4 (Pages 7 and 8).

Source: (The Ministry of Economy, Sultanate of Oman. https://www.economy.gov.om/)

Comment 9:

The study findings should be compared with the literature. / Originality should be stressed clearly.

Response:

The findings of the study are compared with previous literature in Section 5.3: Hypothesis Testing Results (Pages 23 and 24). Furthermore, the originality of the study has been added in the conclusion section (Page 34) as follows:

The findings are consistent with Muthuraman et al. (2022) and Xu et al. (2024), which suggests that as transaction speed becomes increasingly vital, mobile payment systems are positioned to progressively replace traditional payment methods for both businesses and consumers.

This result is comparable to Chou et al. (2020), Foster and Miller (2022), and Zhao et al. (2021), which supports the hypothesis that user errors reduce sustained platform usage.

These findings are consistent with those reported by Lee et al. (2020) and Statista (2023).

The originality of this study stems from its focus on the use of mobile payment technologies in the small and medium-sized enterprises (SMEs) sector in the Sultanate of Oman, a sector that has not received sufficient attention in previous studies within the context of digital transformation. The study also distinguishes itself by its analytical link between the adoption of these technologies and the achievement of the goals of Oman Vision 2040 in building a cashless society. The study relies on an integrated theoretical model that takes into account technical, behavioral, and cultural factors, supported by a mixed methodology that combines quantitative and qualitative analysis to provide a deep and comprehensive understanding of the challenges and opportunities of adoption.

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

The author has updated the manusript as my previous comments.